Debt Recovery

Social Protection Minister Joan Burton has said that the European Central Bank (ECB) needs to change the way it approaches the recovery of debt.

Minister Burton today said the current structure is ‘fairly inflexible’, designed largely for the German economy, and has to evolve.

Her comments come amid continuing controversy over comments by Transport Minister Leo Varadkar in which he reportedly suggested that a second IMF/EU bailout programme might be required for Ireland.

Both Taoiseach Enda Kenny and Finance Minister Michael Noonan yesterday flatly denied that a second bailout would be necessary, while a spokesperson for Minister Varadkar claimed he had merely provided “a hypothetical answer to a hypothetical question” posed by The Sunday Times.

Minister Burton today said Ireland can avoid the necessity for a second bailout by continuing to follow the reform programme already underway, and to by getting domestic lending going again.

However she said a change in Europe’s approach to the problem is crucial.

“If the ECB wants to see Ireland growing, (if) it wants to see Greece recovering… it has to have a policy which focuses on growth, investment and innovation as much as it focuses on fighting inflation,” she said.

“I would say the difficulty with the ECB, from an Irish point of view, is that it is focused almost exclusively on dealing with inflation.”